WASHINGTON — Lori Shelton can’t fathom ever having the money to buy a home — and that’s a major reason why so many voters feel down on the economy ahead of this year’s presidential election.
Shelton, 67, drives an Uber to help pay rent in Aurora, Colorado. An advance on her pay covered her apartment’s security deposit. But it also cut into her next paycheck, leaving her bank account dangerously low when the rent was due — a cycle that never seems to end.
“I’m always one step behind,” said Shelton, her voice choking up. “It’s a nightmare, it’s a freaking nightmare right now.”
The United States is slogging through a housing affordability crisis that was decades in the making. At the root of this problem: America failed to build enough homes for its growing population. The shortage strikes at the heart of the American dream of homeownership — dampening President Joe Biden’s assurances that the U.S. economy is strong and underscoring the degree to which Republican Donald Trump, the former president and presumptive GOP nominee for 2024, has largely overlooked the shortage.
The lack of housing has caused a record number of renters to devote an excessive amount of income to housing, according to a Harvard University analysis. Not enough homes are for sale or being built, keeping prices elevated. Average mortgage rates have more than doubled and further worsened affordability.
In fact, the Census Bureau reported that homeownership fell slightly at the end of last year in an otherwise solid economy. If it wasn’t for shelter costs, inflation — Biden’s most pronounced economic problem — would be running at a healthy and stable 1.8%. Instead, it’s hovering around 3.2%.
Administration officials are confident that shelter inflation will soon cool, but the damage across several years is apparent to advocates and economists.
“I’ve been doing housing work for 30 years — the housing affordability challenge is the worst I’ve ever seen in my career,” said Shaun Donovan, a former secretary of Housing and Urban Development in the Obama years who now leads the nonprofit Enterprise Community Partners.
Donovan noted that this is an increasingly bipartisan challenge that could bring the political parties together. Expensive housing was once the domain of Democratic areas such as New York City and San Francisco. It’s now moved into Republican states as places such as Boise, Idaho, grapple with higher prices.
“It is a first-tier issue almost everywhere,” he said. “And that is changing the national politics around it in a way that I think is quite different than I’ve ever seen.”
Mark Zandi, chief economist at Moody’s Analytics, said that the outcome of the November election could ultimately depend on the path of 30-year mortgage rates.
Rates currently average about 6.74%. If they dropped closer to 6%, the odds of a Biden victory would increase. But rates moving near 8% might enable Trump to prevail, Zandi said.
“Given the current housing affordability crisis, higher rates will make owning a home completely out of reach for nearly all potential first-time homebuyers,” he said. “Since homeownership is a key part of the American dream, if it appears unattainable, this will deeply impact voters’ sense of the economy.”
Biden, a Democrat, acknowledged the pain many are feeling in his State of the Union address earlier this month and in his budget proposal released on Monday.
The president wants to fund the building and preservation of 2 million housing units — a meaningful sum, but not enough to solve the shortage. He also proposed a tax credit worth up to $10,000 to homebuyers. Over the past three years, he has increased rental assistance to 100,000 households.
“The bottom line is we have to build, build, build,” Biden said Monday in a speech to the National League of Cities. “That’s how we bring down housing costs for good.”
Rapidly climbing home prices were also a festering problem under Trump, who first achieved celebrity status as a real estate developer. While president, Trump called for limiting construction in the suburbs. He claimed during the 2020 election that Biden’s policies to spur building and affordability would “destroy your neighborhood.”
During the 2018 to 2020 years of Trump’s presidency, the country’s housing shortage surged 52% to 3.8 million units, according to the mortgage company Freddie Mac.
The Associated Press contacted Trump’s campaign for his policy plans but did not get a response. The America First Policy Institute, a think tank promoting Trump’s vision, said the key is to cut government borrowing to reduce mortgage rates. The former president has pledged to reduce deficits, but an analysis by the Committee for a Responsible Federal Budget shows that his policies in office will have likely added more than $8 trillion to the national debt.
“The best way for us to improve access to homeownership for young people is to get interest rates back down, not to provide subsidies that cause housing unaffordability to worsen,” said Mike Faulkender, chief economist at the institute.
Lower rates might play well with voters, but most economists say they would at best offer temporary financial relief. Purchase prices would likely adjust upward in response to greater demand from falling rates.
Construction, the more enduring solution, would take years to achieve and require new rules by states and cities. The administration is trying to incentivize zoning changes, but the major choices are outside the White House’s control.
“Even as incomes are going up and the economy is doing well and inflation is coming down, people can’t buy homes,” said Daryl Fairweather, chief economist at the brokerage Redfin. “That’s like the biggest problem for Biden because it’s not one that he can solve.”
The general rule of thumb is that people should pay no more than 30% of their income on rent or a mortgage. A typical household looking to buy a home would have to devote 41% of its income to mortgage payments, according to Redfin.
There are far-reaching economic risks because of this. High housing costs can lead people to cut back spending elsewhere. Advocates said it enables landlords to neglect their properties since there is always a ready tenant.
Evictions can worsen health and educational outcomes for children and exact an even wider cost on society, said Zach Neumann, a Denver-based lawyer who provides more than $30 million annually in rental assistance through the nonprofit Community Economic Defense Project.
The cumulative costs of evicting poorer renters are “$20,000 to $30,000 a year when you include shelter nights and emergency room visits,” Neumann said. “It’s really overwhelming when you think about the total numbers and these folks are fighting to have a roof over their heads.”
While there is bipartisan agreement on the need for more housing, there has yet to be a significant plan that has passed the House and Senate. Biden has proposed housing aid throughout his administration that never materialized.
“Had Congress passed some of the investments that the president has called for since the beginning of the administration, had they done that three years ago, as he was advocating, we’d have affordable units coming online right now,” said Daniel Hornung, deputy director of the White House National Economic Council.
But Mark Calabria, who was director of the Federal Housing Finance Agency during the Trump administration, said that many of the federal tools to increase housing such as the Low-Income Housing Tax Credit could further push up demand without adding enough construction.
“My worry would be we’ve done a number of things that increased demand when the problem is supply,” said Calabria, now an adviser with the libertarian Cato Institute.
But for renters such as Lori Shelton in Colorado, the debate about how to add housing supply is cold comfort when she owes rent now. She’s previously dealt with the threat of eviction and late fees. She gets some rent money from her son, but she has also relied at times on her church to cover the $2,399 a month.
“I don’t think the majority of us have that savings account,” she said. “If you spend that much on your rent and your groceries and your car and your bills, you don’t have much for a fallback.”
Republican presidential candidate and former U.S. President Donald Trump speaks during a Fox News town hall at the Greenville Convention Center in Greenville, South Carolina, on Feb. 20, 2024.
Justin Sullivan | Getty Images
Donald Trump is racing to stave off a pair of civil penalties totaling nearly $540 million, without having to first put up the full amounts in cash or bonds.
The former president’s lawyers claim that he would face “irreparable” harm if required to fully secure his judgments in order to keep them from coming due, and might even have to quickly sell off properties that can’t be rebought.
They also say Trump can’t simply post a cash deposit — at least not in his New York civil business fraud case, where he is facing $454 million in fines and interest alone.
“No one, including Jeff Bezos, Elon Musk and Donald Trump, has five hundred million laying around,” Trump’s attorney Chris Kise told an appeals court judge last week.
But legal experts say there’s another option that Trump’s lawyers haven’t mentioned in the court filings: Trump could offer up some of his properties as collateral to borrow what he needs — potentially from private equity sources.
There are “lots of private lenders out there in the debt markets and private equity markets that could lend” to Trump, said Columbia University law professor Eric Talley.
“In all cases, the loans would probably have to be secured with Trump properties, but if there is enough equity in some of them, he should be able to obtain secured credit, even on a compressed timeline,” Talley said.
In this courtroom sketch, former U.S. President Donald Trump looks on as his attorney Alina Habba delivers closing arguments during E. Jean Carroll’s second civil trial in which Carroll accused Trump of raping her decades ago, at Manhattan Federal Court in New York City on Jan. 26, 2024.
Jane Rosenberg | Reuters
The professor underscored the irony of Trump using his real estate to fight a lawsuit in which he was found liable for fraudulently inflating his property values for financial gain.
Any loans “would themselves involve making declarations of the value of the property — and that of course is what got him into this mess to begin with,” said Talley.
But accurately appraising the value of Trump’s assets is not a serious obstacle. As Trump’s lawyers noted during the fraud trial, the institutions that have lent him money already have conducted their own analyses of Trump’s finances, and did not rely solely on the claims at issue in his financial statements.
A more important factor could be whether Trump’s real estate assets are already mortgaged, said law professor John Coffee.
“He would have to come up with clean real estate property that is not already securing something that some other bank has a lien on,” Coffee said.
“Does he have that property? I can’t tell you.”
What Trump owns
As of late January, the Trump Organization comprised 415 entities, according to Barbara Jones, a retired federal judge tasked with monitoring the company’s finances.
Of those, Jones identified 70 operating entities that generate revenue. That includes long-term leases of buildings such as 40 Wall Street, commercial office space on 13 floors of the 58-story Trump Tower, plus the Trump National Doral Miami resort.
In New York City, the value of Trump’s real estate holdings totals $690 million, according to a September 2023 estimate by Forbes. Some of the most prominent buildings that bear Trump’s name in the city are largely owned by other entities.
New York Attorney General Letitia James, who brought the fraud case, said she would seize Trump’s real estate assets if he cannot pay his civil penalty.
“There’s absolutely no reason for the New York attorney general to be kind and gentle to him if he doesn’t post the bond,” Coffee said.
A view leading into Trump National Doral in Miami, Florida, on April 3, 2018.
Michele Eve Sandberg | AFP | Getty Images
Trump said in a deposition last year that he had “substantially in excess of $400 million in cash.” But his lawyers claimed last week that, if Trump is forced to secure the full $454 million penalty, “properties would likely need to be sold to raise capital under exigent circumstances.”
They instead offered to post a $100 million bond, but New York appeals court Judge Anil Singh rejected the proposal.
Unless a full appeals court reverses Singh’s decision, Trump has until March 25 to post an “undertaking” — cash or bonds — covering the entire penalty in order to stop it from taking effect during his appeal.
Trump has also asked a federal judge to delay another fast-approaching deadline to pay an $83.3 million penalty in E. Jean Carroll’s civil defamation case.
Carroll’s attorneys argued that Trump’s request “boils down to nothing more than ‘trust me.'”
Trump’s next move
If Trump does attempt to sell assets to meet his undertaking, he won’t have much time to get it done.
He would have to hire a broker to market his properties, and any deal would have to close to free up the cash to use toward a bond, said Neil Pedersen, owner of New York-based bond agency Pedersen & Sons.
“There could be opportunistic buyers approaching him as well,” Pedersen noted.
So far, Trump has given no indication that he is moving in that direction.
“There are no sales planned or contemplated,” Kise told CNBC in an email before Singh’s ruling. “So no appraisers hired, no steps taken, etc.”
The Trump Tower on 5th Avenue is pictured in the Manhattan borough of New York City on April 18, 2019.
Caitlin Ochs | Reuters
After Singh ordered Trump to pay the full penalty, Kise and Trump’s other attorneys did not reply to questions about whether they were now preparing to sell off properties.
Coffee said Trump “can very likely” get a loan to help him meet his undertaking. That’s in part because Singh temporarily halted another penalty that would bar Trump from applying for loans from New York registered lenders.
Moreover, said Coffee, Trump is well-known within New York financial circles, so he is “not going into a market with strangers.”
“The real problem is, can he give the banks enough collateral that they’re satisfied?”
Talley agreed. “There is a lot of ‘dry powder’ out there — not just with banks, but also in non-banks,” he said.
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Republican presidential candidate, former U.S. President Donald Trump speaks during a Fox News town hall at the Greenville Convention Center on February 20, 2024 in Greenville, South Carolina.
Justin Sullivan | Getty Images
They also say Trump can’t simply post a cash deposit — at least not in his New York civil business fraud case, where he is facing $454 million in fines and interest alone.
“No one, including Jeff Bezos, Elon Musk and Donald Trump, has five hundred million laying around,” Trump’s attorney Chris Kise told an appeals court judge last week.
But legal experts say there’s another option that Trump’s lawyers haven’t mentioned in the court filings: Trump could offer up some of his properties as collateral to borrow what he needs — potentially from private equity sources.
There are “lots of private lenders out there in the debt markets and private equity markets that could lend” to Trump, said Columbia University law professor Eric Talley.
“In all cases, the loans would probably have to be secured with Trump properties, but if there is enough equity in some of them, he should be able to obtain secured credit, even on a compressed timeline,” Talley said.
In this courtroom sketch, former U.S. President Donald Trump looks on as his attorney Alina Habba delivers closing arguments during E. Jean Carroll’s second civil trial in which Carroll accused Trump of raping her decades ago, at Manhattan Federal Court in New York City on Jan. 26, 2024.
Jane Rosenberg | Reuters
The professor underscored the irony of Trump using his real estate to fight a lawsuit in which he was found liable for fraudulently inflating his property values for financial gain.
Any loans “would themselves involve making declarations of the value of the property — and that of course is what got him into this mess to begin with,” said Talley.
But accurately appraising the value of Trump’s assets is not a serious obstacle. As Trump’s lawyers noted during the fraud trial, the institutions that have lent him money already have conducted their own analyses of Trump’s finances, and did not rely solely on the claims at issue in his financial statements.
A more important factor could be whether Trump’s real estate assets are already mortgaged, said law professor John Coffee.
“He would have to come up with clean real estate property that is not already securing something that some other bank has a lien on,” Coffee said.
“Does he have that property? I can’t tell you.”
As of late January, the Trump Organization comprised 415 entities, according to a retired federal judge tasked with monitoring the company’s finances.
Of those, Jones identified 70 operating entities that generate revenue. That includes long term leases of buildings like 40 Wall Street, commercial office space on 13 floors of the 58 story Trump Tower, and the Trump National Doral Miami resort.
View leading into Trump National Doral in Miami, Florida on April 3, 2018.
Michele Eve Sandberg | AFP | Getty Images
In New York City, the value of Trump’s real estate holdings totals $690 million, according to a September 2023 estimate by Forbes. And some of the most prominent buildings that bear Trump’s name in the city are largely owned by other entities.
New York Attorney General Letitia James, who brought the fraud case, said she would seize Trump’s real estate assets if he cannot pay his civil penalty.
“There’s absolutely no reason for the New York attorney general to be kind and gentle to him if he doesn’t post the bond,” Coffee said.
Trump said in a deposition last year that he had “substantially in excess of $400 million in cash.” But his lawyers claimed last week that, if Trump is forced to secure the full $454 million penalty, “properties would likely need to be sold to raise capital under exigent circumstances.”
They instead offered to post a $100 million bond, but New York appeals court Judge Anil Singh rejected the proposal.
Unless a full appeals court reverses Singh’s decision, Trump has until March 25 to post an “undertaking” — cash or bonds — covering the entire penalty in order to stop it from taking effect during his appeal.
Trump has also asked a federal judge to delay another fast-approaching deadline to pay an $83.3 million penalty in E. Jean Carroll’s civil defamation case.
Carroll’s attorneys argued that Trump’s request “boils down to nothing more than ‘trust me.'”
If Trump does attempt to sell assets to meet his undertaking, he won’t have much time to get it done.
He would have to hire a broker to market his properties, and any deal would have to close in order to free up the cash to use toward a bond, said Neil Pedersen, owner of New York-based bond agency Pedersen & Sons.
“There could be opportunistic buyers approaching him as well,” Pedersen noted.
So far, Trump has given no indication that he is moving in that direction.
“There are no sales planned or contemplated,” Kise told CNBC in an email before Singh’s ruling. “So no appraisers hired, no steps taken, etc.”
Trump Tower on 5th Avenue is pictured in the Manhattan borough of New York City, New York, U.S., April 18, 2019.
Caitlin Ochs | Reuters
After Singh ordered Trump to pay the full penalty, Kise and Trump’s other attorneys did not reply to questions about whether they were now preparing to sell off properties.
Coffee said that Trump “can very likely” get a loan to help him meet his undertaking. That’s in part because Singh temporarily halted another penalty that would bar Trump from applying for loans from New York registered lenders.
Moreover, said Coffee, Trump is well known within New York financial circles, so he “not going into a market with strangers.”
“The real problem is, can he gives the banks enough collateral that they’re satisfied?”
Talley agreed. “There is a lot of ‘dry powder’ out there, not just with banks but also in non-banks,” he said.
The reason for the raid wasn’t immediately clear. It comes amid a federal probe related to political fundraising during Adams’ 2021 campaign.
Greco also became the subject of a probe by the city’s Department of Investigation following a report in The City, a local news site, that raised questions about her political fundraising and whether she used her position in the administration to obtain personal benefits, including free housework from a city employee.
Greco was placed on administrative leave Thursday, according to a City Hall spokesperson.
The federal investigation into campaign fundraising emerged in November after the FBI raided the home of Brianna Suggs, a top fundraiser for Adams. Four days later, agents quietly seized the mayor’s cellphones and an iPad as he was leaving an event in Manhattan.
The probe is believed to be focused, at least in part, on whether the Adams campaign conspired with the Turkish government to receive illegal campaign contributions from foreign sources, funneled through straw donors, according to a warrant reported on by The New York Times.
Adams has repeatedly deflected questions about the investigation while stressing that he has not officially been accused of wrongdoing.
“Our administration will always follow the law, and we always expect all our employees to adhere to the strictest ethical guidelines,” a spokesperson for the mayor said in a statement Thursday. “As we have repeatedly said, we don’t comment on matters that are under review, but will fully cooperate with any review underway.”
There was no immediate response to a voicemail seeking comment left at a phone number listed as Greco’s.
A spokesperson for the federal prosecutor in Manhattan declined to comment.
A Virginia bank that is seeking to recover more longstanding unpaid business loans to the family of West Virginia Gov. Jim Justice plans to to auction off land at a sporting club located at the governor’s posh resort
CHARLESTON, W.Va. — A Virginia bank that is seeking to recover more than $300 million in longstanding unpaid business loans to the family of West Virginia Gov. Jim Justice is planning to auction off land at a sporting club located at the governor’s posh resort.
Carter Bank & Trust of Martinsville, Virginia, took out a legal notice in the Charleston Gazette-Mail on Tuesday. The notice said that an auction involving the Greenbrier Sporting Club lots is scheduled for March 5 at the Greenbrier County Courthouse in Lewisburg.
The Greenbrier Sporting Club is a private equity club and residential community that opened in 2000. Justice bought The Greenbrier, which has hosted U.S. presidents and royalty, out of bankruptcy in 2009. The PGA Tour held a tournament at the resort from 2010 until 2019.
In a 2021 lawsuit that Justice and his companies filed against Carter Bank, the governor revealed that he is personally on the hook for $368 million in remaining loan debt to that bank. He also said that a close business relationship dramatically fell apart after the death of the bank’s founder, Worth Carter, in 2017. The 2021 lawsuit was later dismissed, but the Justice companies filed another lawsuit against the bank last November.
Justice, who owns dozens of companies, also has been the subject of numerous court claims that he has been late in paying millions of dollars he owes in fines, such as for unsafe working conditions at his coal mines.
Messages left with the governor’s office and with the Justice companies weren’t immediately returned Tuesday afternoon.
Justice, a Republican, is finishing his second term as governor this year and is running for the U.S. Senate seat currently held by Democrat Joe Manchin. Manchin has said he is not seeking reelection.
Last year dozens of properties owned by Justice in three counties were put up for auction as payment for delinquent real estate taxes.
Lunenburg’s town council will gather more details on what a major new development could mean for local taxes before starting the process to sell public land for the new neighbourhood.
People packed the gallery of the Town of Lunenburg’s council meeting Tuesday evening where Blockhouse Hill was on the agenda.
Consultants MacKay-Lyons Sweetapple Architects presented three options of what a new neighbourhood could look like on the back slope of Blockhouse hill, and a fourth option to leave it as a park.
Resident Heather Langille was among the six residents who raised concerns about the plan and called for councillors to consider more information before moving ahead.
“It should stay in public hands and it should not be sold for private interests,” Langille said after the meeting.
The development options have a mix of semi-detached duplexes, townhomes and secondary suites in a stepped design down the slope to the Back Harbour. New roads and pedestrian-only green streets are also included, and all options would not touch the existing RV campground and Sylvia Park.
The number of possible housing units range from none, if the land remains as is, to the highest-density option of 368 units.
Municipal staff said during the meeting that selling the land, and adding new taxpayers to the town, will help with Lunenburg’s aging infrastructure and housing crunch. A recent town report said it will cost about $46 million to fix 10 buildings in need of maintenance.
A housing assessment for Lunenburg states the town of 2,300 people needs 120 new housing units by 2027, and 170 by 2032 to accommodate its growing population.
But Langille said there are other areas of town “much more suitable” for housing. A petition from more than 700 local residents has asked to pause the project.
Council, based on a suggestion from Mayor Jamie Myra, voted to delay voting on declaring the land surplus — which would allow it to eventually sell the land for development — until March to hear back from staff on the taxes implications.
“We need to have some idea of those costs going forward to make educated decisions … that are better for the residents of our community and I think that’s really important,” Myra said after the meeting.
There will be another public hearing before any final decision is made.
Councillors also directed the consultants to draft development rules for the highest-density option — 368 units with about 36 per cent of the site as park space — which would set out detailed requirements attached to land even after it changes hands.
Consultants have estimated that option would cost about $182 million in construction, labour and water and wastewater upgrades for whoever develops the land.
Coun. Peter Mosher said he’d like to have rules for the “full plan” that could always be scaled down, or built in phases over the coming decades.
Staff had suggested drafting rules for the second-densest option (256 units) which was also the top choice for most people surveyed during the consultant’s workshops.
The Friends of Blockhouse Hill advocacy group raised concerns during the meeting, and in a letter to council, about development’s impact on the town’s UNESCO World Heritage designation. They have also taken issue with how only 10 per cent of the homes would be designated as affordable.
Julian Smith is an expert heritage planner on the consultant’s team who co-authored UNESCO’s recommendation on the historic urban landscape. He told the meeting all the development options in the buffer zone around Old Town Lunenburg are not highrise or industrial, so they would not hurt its designation.
In fact, Smith said a past chair of UNESCO’s World Heritage Committee told him buffer development that helps the Old Town survive as a “healthy community” where locals can afford to live would benefit both Lunenburg and be an inspiration to sites around the world.
Concerns about tourism pressure
Smith said Venice’s UNESCO designation, for instance, was put in danger this summer because tourism pressures have pushed affordable housing, and the ability for people to live normal lives, out of the historic city.
“Lunenburg is already feeling the effects of global tourism but those will only increase with time, and that’s a very serious threat to the integrity of world heritage sites,” Smith said.
But resident and Friends of Blockhouse Hill member, Alison Strachan, said Lunenburg’s tourism is seasonal and housing shortages could be reduced by cracking down short-term rentals.
She said town council could possibly look at Halifax’s rules requiring that rentals are owner-occupied in most residential zones.
Strachan also said consultation with the Mi’kmaw community is needed, as well as more research into the Indigenous history around the hill which has been largely unexplored.
“We should be the leaders in reconciliation. We are a colonized town — at their detriment,” Strachan said.
Myra said he would like the issue to go to a plebiscite in the upcoming October municipal elections.